A Businesslike University

By Sandra Salmans; Sandra Salmans is a freelance writer in Washington, D.C.

Published: August 7, 1988

AT HAMPTON University in Virginia, learning pays - literally. Entering students whose combined Scholastic Aptitude Test scores exceed 1200 (out of a possible 1600) get free tuition; those with scores over 1300 get free tuition, room and board. Students who qualify for the honors dormitory on the city's Hampton River waterfront pay lower rent and enjoy other amenities, such as a swimming pool. Nor are the incentives limited to the student body. A faculty member who publishes an article in a so-called refereed journal, whose content is reviewed by peers, receives $1,000; faculty members can compete for a few hundred dollars more by writing the most book reviews in the three local newspapers.

If such financial incentives are an unusual way to run a university, they are not an unreasonable way to run a business. And that, according to William R. Harvey, Hampton's 47-year-old president and a private entrepreneur himself, is just the way a university should be run. In his decade at Hampton, a black college founded 120 years ago, Dr. Harvey has put the university on the kind of businesslike footing that many businesses never achieve.

Under his leadership the endowment has ballooned, from $29 million when he took over to $76 million this year - making Hampton the richest of the black colleges. (The endowment had actually soared to $84 million but, like many universities, Hampton took a beating when the stock market collapsed last October.) The university has been operating well within its budget every year. Enrollment has also doubled, to some 5,000, including 1,000 graduate students. This year there were more than 8,000 applications for the 900 projected places in the freshman class, Dr. Harvey said - a remarkable ratio that reflects the university's improved reputation as well as the revival of interest among black students in black colleges.

Hampton was founded in 1868 as the Hampton Normal and Agricultural Institute by Samuel Armstrong, a white missionary born in Hawaii who discerned the need for education among newly emancipated slaves. General Armstrong, as he was known, was ''the rarest, strongest, and most beautiful character that it has ever been my privilege to meet,'' wrote the school's most famous alumnus, Booker T. Washington, the great educator who was born into slavery, earned a degree at the Hampton Institute in 1875 and went on to found the Tuskegee Institute, now Tuskegee University. Washington's larger-than-life statue is one of the campus's landmarks today; he is depicted pointing to another campus landmark, the Emancipation Oak, under which the Emancipation Proclamation was read in Hampton in 1863. 'To Lift Up the People at His Home'

In his autobiography, ''Up From Slavery,'' Washington recalled how he arrived at Hampton with 50 cents to his name and gained admittance to the school by carefully sweeping and dusting one of the classrooms. He was among the students who volunteered to live in unheated tents one winter when the school buildings, designed for 25 students, became overcrowded. At Hampton, he wrote, ''the great and prevailing idea that seemed to take possession of everyone was to prepare himself to lift up the people at his home.'' In 1878 the school became home to a second minority group, as hundreds of Indians, mostly from the Plains states, were sent there by the Federal Government to acquire some learning.

But Hampton, along with a number of black colleges, had been in decline in recent years. Enrollment had been dropping; so had corporate giving. Under the pressure of black militancy in the late 1960's and 1970's, many of the highly placed white trustees had left the board. Between 1972 and 1979, Dr. Harvey's first full year, Hampton had an operating deficit every year; in 1978 it was $486,000.

The son of an Alabama building contractor, William Harvey graduated from Talladega College, a black school in Alabama, and earned a master's degree in history at Virginia State University, also historically black. He went on to get a doctorate in college administration at Harvard, where he served as assistant to the dean for governmental affairs - a job that included weekly forays into the Federal Government's labyrinth of education policy-making and grant-giving. He spent six more years in administration at Fisk University, another traditionally black school in Nashville, and at Tuskegee. His interest has always been in academic management - with the accent on management. ''You must run a college or university like a business with an educational objective,'' he said. ''What we've tried to do is run Hampton like a business.''

For a start, that meant stanching the flow of red ink. The university's annual budget has tripled since his arrival, to $45 million in the coming academic year, but Dr. Harvey still practices zero-sum budgeting, in which each budget item must be justified anew each year. The president also introduced a system of quarterly budgeting that forced deans and department chairmen to justify their purchases in a way that, he said, ''academic types don't like to do.'' If a department chairman needs to dip into the next quarter's allocation for a large purchase, such as microscopes for the biology department, he must get the approval of the dean of his school, the vice president of academic affairs and, finally, Dr. Harvey. Virtually all such requests are approved, Dr. Harvey said, but ''the budget process is not just an academic undertaking.''